SEC Roasts Keurig for Claims Regarding Recycling of K - Cup Pods | BCLP
On September 10, 2024, the SEC charged Keurig Dr. Pepper for making misleading statements about the recyclability of its K-cup pods. Keurig claimed in its Form 10-Ks that the pods could be effectively recycled, without disclosing that major recyclers found the recycling process not commercially feasible and did not plan to accept the pods. To settle the charges, Keurig paid a $1.5 million fine and agreed to a cease and desist order. The SEC order highlighted Keurig s goal to make all pods recyclable by 2020 and the importance of recyclability to its business, as consumer concerns about sustainability were a significant factor in purchasing decisions. Keurig conducted tests to assess the recyclability of its pods, but despite positive results, two major recyclers expressed concerns about the commercial feasibility of recycling the pods. Commissioner Hester Peirce dissented from the order, arguing that Keurig s statements were accurate, even if third-party recyclers did not accept the pods. She also questioned the materiality of the statements and the SEC s case, as no charges were filed under antifraud rules. This case serves as a reminder for companies to ensure their disclosures present a complete and accurate picture, especially regarding environmental matters. The SEC may challenge product statements, even if their materiality is debatable. Companies should be cautious about making claims that may be technically accurate but fail to address potential challenges or limitations.
Source: jdsupra.comPublished on 2024-09-19
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